Kentucky Statutes 355.4-301 – Deferred posting — Recovery of payment by return of items — Time of dishonor — Return of items by payor bank
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(1) If a payor bank settles for a demand item other than a documentary draft presented otherwise than for immediate payment over the counter before midnight of the banking day of receipt, the payor bank may revoke the settlement and recover the settlement if, before it has made final payment and before its midnight deadline, it:
(a) Returns the item; or
(b) Sends a record providing notice of dishonor or nonpayment if the item is unavailable for return.
(2) If a demand item is received by a payor bank for credit on its books, it may return the item or send notice of dishonor and may revoke any credit given or recover the amount thereof withdrawn by its customer, if it acts within the time limit and in the manner specified in subsection (1) of this section.
(3) Unless previous notice of dishonor has been sent, an item is dishonored at the time when for purposes of dishonor it is returned or notice sent in accordance with this section.
(4) An item is returned:
(a) As to an item presented through a clearing house, when it is delivered to the presenting or last collecting bank or to the clearing house or is sent or delivered in accordance with clearing-house rules; or
(b) In all other cases, when it is sent or delivered to the bank’s customer or transferor or pursuant to instructions.
Effective: July 12, 2006
History: Amended 2006 Ky. Acts ch. 242, sec. 50, effective July 12, 2006. — Amended
1996 Ky. Acts ch. 130, sec. 99, effective January 1, 1997. — Created 1958 Ky. Acts ch. 77, sec. 4-301, effective July 1, 1960.
(a) Returns the item; or
Terms Used In Kentucky Statutes 355.4-301
- Banking day: means the part of a day on which a bank is open to the public for carrying on substantially all of its banking functions. See Kentucky Statutes 355.4-104
- Clearing house: means an association of banks or other payors regularly clearing items. See Kentucky Statutes 355.4-104
- Customer: means a person having an account with a bank or for whom a bank has agreed to collect items including a bank that maintains an account at another bank. See Kentucky Statutes 355.4-104
- Documentary draft: means a draft to be presented for acceptance or payment if specified documents, certificated securities (KRS §. See Kentucky Statutes 355.4-104
- Item: means an instrument or a promise or order to pay money handled by a bank for collection or payment. See Kentucky Statutes 355.4-104
- Settlement: Parties to a lawsuit resolve their difference without having a trial. Settlements often involve the payment of compensation by one party in satisfaction of the other party's claims.
(b) Sends a record providing notice of dishonor or nonpayment if the item is unavailable for return.
(2) If a demand item is received by a payor bank for credit on its books, it may return the item or send notice of dishonor and may revoke any credit given or recover the amount thereof withdrawn by its customer, if it acts within the time limit and in the manner specified in subsection (1) of this section.
(3) Unless previous notice of dishonor has been sent, an item is dishonored at the time when for purposes of dishonor it is returned or notice sent in accordance with this section.
(4) An item is returned:
(a) As to an item presented through a clearing house, when it is delivered to the presenting or last collecting bank or to the clearing house or is sent or delivered in accordance with clearing-house rules; or
(b) In all other cases, when it is sent or delivered to the bank’s customer or transferor or pursuant to instructions.
Effective: July 12, 2006
History: Amended 2006 Ky. Acts ch. 242, sec. 50, effective July 12, 2006. — Amended
1996 Ky. Acts ch. 130, sec. 99, effective January 1, 1997. — Created 1958 Ky. Acts ch. 77, sec. 4-301, effective July 1, 1960.